How SARS witness’s evidence helped employee win back job after R3.6m VAT audit

A South African Revenue Service (SARS) employee who faced dismissal over a R3.6 million VAT refund audit has had her job reinstated after the Labour Court ruled that her mistakes did not warrant termination. The key evidence came from an SARS witness who testified in the arbitration proceedings, expressing continued trust in the employee and stating that similar missteps were typically handled through warnings rather than dismissals.

The court, presided over by Judge Makhura, overturned an earlier CCMA arbitration award supporting the SARS dismissal. The employee, who had been with the revenue service for over 26 years without disciplinary issues, faced allegations of gross negligence for her role in a VAT refund claim involving the Muslim Judicial Council Land Trust, which was submitted for April 2019.

The audit team identified six risks, but SARS accused the employee of failing to properly document findings for three of them, resulting in a financial loss of R3.6 million.

However, the court disagreed with SARS's assessment, finding that the employee had addressed the risks but failed to document findings for three specific instances. The SARS Audit Operations Manager, the witness for the Crown, testified that she still trusted the employee, describing the misconduct as a one-off occurrence. The court emphasized that negligence is not automatically considered gross simply because an employer labels it as such; its seriousness must be objectively determined based on the specific case facts.

Additionally, the court ruled that the R3.6 million refund was legitimate and lawfully due to the Muslim Judicial Council Land Trust. The revenue service ultimately paid the funds on May 18, 2021, finding no financial loss due to the employee's actions. While the court found the employee guilty of negligence, it deemed dismissal disproportionate.

Consequently, the dismissal was declared substantively unfair, and SARS was ordered to reinstate the employee without loss of benefits, along with paying backpay within 15 days. The employee was also given a written warning valid for five months.